[Federal Register: May 13, 2004 (Volume 69, Number 93)]

[Rules and Regulations]

[Page 26508-26509]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

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DEPARTMENT OF DEFENSE

48 CFR Parts 225 and 252

[DFARS Case 2003-D099]

Defense Federal Acquisition Regulation Supplement; Berry Amendment Changes

AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for comments.

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SUMMARY: DoD has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Sections 826 and 827 of the National Defense Authorization Act for Fiscal Year 2004. Sections 826 and 827 provide exceptions to the domestic source requirements of the Berry Amendment. Section 826 applies to the acquisition of food, specialty metals, and hand or measuring tools needed to support contingency operations or to fulfill other urgent requirements. Section 827 applies to the acquisition of waste and byproducts of cotton or wool fiber for use in the production of propellants and explosives.

DATES: Effective date: May 13, 2004.

Comment date: Comments on the interim rule should be submitted to the address shown below on or before July 12, 2004, to be considered in the formation of the final rule.

ADDRESSES: Respondents may submit comments via the Internet at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcom. As an alternative, respondents may e-mail comments to: dfars@osd.mil. Please cite DFARS Case 2003-D099 in the subject line of e-mailed comments.

Respondents that cannot submit comments using either of the above methods may submit comments to: Defense Acquisition Regulations Council, Attn: Ms. Amy Williams, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; facsimile (703) 602-0350. Please cite DFARS Case 2003-D099.

At the end of the comment period, interested parties may view public comments on the Internet at http://emissary.acq.osd.mil/dar/dfars.nsf

.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, (703) 602-0328.

SUPPLEMENTARY INFORMATION:

A. Background

DFARS 225.7002-1 contains requirements for the acquisition of certain items from domestic sources in accordance with the Berry Amendment (10 U.S.C. 2533a). DFARS 225.7002-2 provides exceptions to these requirements. This interim rule adds new exceptions to DFARS 225.7002-2 to implement Sections 826 and 827 of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 108-136). Section 826 applies to the acquisition of food, specialty metals, and hand or measuring tools when needed to support contingency operations or when the use of other than competitive procedures has been approved on the basis of unusual and compelling urgency. Section 827 applies to the acquisition of waste and byproducts of cotton or wool fiber for use in the production of propellants and explosives. A corresponding change is made to the clause at DFARS 252.225-7012.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

DoD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the exceptions to domestic source requirements authorized by the rule are limited to acquisitions of items needed to support contingency operations, to fulfill requirements that are of unusual and compelling urgency, or to produce propellants and explosives. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2003-D099.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

D. Determination To Issue an Interim Rule

A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule implements Sections 826 and 827 of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 108-136). Sections 826 and 827 provide exceptions to the domestic source requirements of the Berry Amendment (10 U.S.C. 2533a). Section 826 applies to the acquisition of food, specialty metals, and hand or measuring tools needed to support contingency operations or to fulfill other urgent requirements. Section 827 applies to the acquisition of waste and byproducts of cotton or wool fiber for use in the production of propellants and explosives. Sections 826 and 827 became effective on November 24, 2003. Comments received in response to this interim rule will be considered in the formation of the final rule.

[[Page 26509]]

List of Subjects in 48 CFR Parts 225 and 252

Government procurement.

Michele P. Peterson,

Executive Editor, Defense Acquisition Regulations Council.

0

Therefore, 48 CFR Parts 225 and 252 are amended as follows:

0

1. The authority citation for 48 CFR Parts 225 and 252 continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 225--FOREIGN ACQUISITION

0

2. Section 225.7002-2 is amended as follows:

0

a. By redesignating paragraphs (f) through (i) and (j) through (m) as paragraphs (g) through (j) and (l) through (o), respectively; and

0

b. By adding new paragraphs (f) and (k) to read as follows:

225.7002-2 Exceptions.

* * * * *

(f) Acquisitions of food, specialty metals, or hand or measuring

tools--

(1) In support of contingency operations; or

(2) For which the use of other than competitive procedures has been approved on the basis of unusual and compelling urgency in accordance with FAR 6.302-2.

* * * * *

(k) Acquisitions of waste and byproducts of cotton or wool fiber for use in the production of propellants and explosives.

* * * * *

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

252.212-7001 [Amended]

0

3. Section 252.212-7001 is amended as follows:

0

a. By revising the clause date to read ``(MAY 2004)''; and

0

b. In paragraph (b), in entry ``252.225-7012'', by removing ``(FEB 2003)'' and adding in its place ``(MAY 2004)''.

0

4. Section 252.225-7012 is amended as follows:

0

a. By revising the clause date to read ``(MAY 2004)'';

0

b. By redesignating paragraphs (c)(3) through (5) as paragraphs (c)(4) through (6), respectively; and

0

c. By adding a new paragraph (c)(3) to read as follows:

252.225-7012 Preference for Certain Domestic Commodities.

* * * * *

(c) * * *

(3) To waste and byproducts of cotton or wool fiber for use in the production of propellants and explosives;

* * * * *

[FR Doc. 04-10880 Filed 5-12-04; 8:45 am]

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[Federal Register: May 13, 2004 (Volume 69, Number 93)]

[Rules and Regulations]

[Page 26507-26508]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr13my04-11]

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DEPARTMENT OF DEFENSE

48 CFR Part 217

[DFARS Case 2003-D004]

Defense Federal Acquisition Regulation Supplement; Multiyear Procurement Authority for Environmental Services for Military Installations

AGENCY: Department of Defense (DoD).

ACTION: Final rule.

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SUMMARY: DoD has adopted as final, without change, an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 827 of the National Defense Authorization Act for Fiscal Year 2003. Section 827 authorizes DoD to enter into multiyear contracts for environmental remediation services for military installations.

EFFECTIVE DATE: May 13, 2004.

FOR FURTHER INFORMATION CONTACT: Mr. Euclides Barrera, Defense Acquisition Regulations Council, OUSD (AT&L) DPAP (DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0296; facsimile (703) 602-0350. Please cite DFARS Case 2003-D004.

SUPPLEMENTARY INFORMATION:

A. Background

DoD published an interim rule at 68 FR 43332 on July 22, 2003, to implement Section 827 of the National Defense Authorization Act for Fiscal Year 2003 (Public Law 107-314). Section 827 amended 10 U.S.C. 2306c to provide authority for DoD to enter into multiyear contracts for environmental remediation services for military installations. Two sources submitted comments on the interim rule. A discussion of the comments is provided below.

1. Comment: The interim rule is a major step forward for environmental remediation that can be accomplished within 5 years. However, the rule should provide for limited authority beyond 5 years where practicable and in the best interest of the Government.

DoD Response: The recommended change is not feasible, since 10 U.S.C. 2306c limits multiyear contracting authority for services to not more than 5 years.

2. Comment: DFARS 232.703-1(1)(iii), which addresses incremental funding, must be sustained and clarified to provide the ability to cash flow expensive remedial projects that cannot be fully funded within a single year appropriation.

DoD Response: No change to the incremental funding policy in DFARS 232.703-1(1)(iii) is necessary for implementation of this rule.

3. Comment: There is confusion within DoD as to what constitutes environmental services and environmental construction. DoD should clarify that all actions taken to remediate contamination under the DERA program constitute environmental services.

DoD Response: The recommended clarification is outside the scope of this DFARS case.

4. Comment: The definition of ``military installation'' or the list in DFARS 217.171(a)(1)(v) should specifically include industrial property to remove any question as to whether the remediation services can be used at both active and former government-owned-contractor-operated industrial plants currently or previously owned by DoD.

DoD Response: The definition of ``military installation'' in DFARS 217.103 and the list in DFARS 217.171(a)(1)(v) are consistent with the provisions of 10 U.S.C. 2306c as amended by Section 827 of Public Law 107-314. The multiyear contracting authority provided by the rule applies to environmental remediation services that meet the criteria at DFARS 217.171(a)(1)(v).

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

[[Page 26508]]

B. Regulatory Flexibility Act

DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because application of the rule is limited to contracts for environmental remediation services at military installations or sites formerly used by DoD. Before using the multiyear contracting authority provided by the rule, the head of the agency must determine that certain conditions exist, to include a determination that use of a multiyear contract will promote the best interests of the United States by encouraging effective competition and promoting economies in operations.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 217

Government procurement.

Michele P. Peterson,

Executive Editor, Defense Acquisition Regulations Council.

Interim Rule Adopted as Final Without Change

0

Accordingly, the interim rule amending 48 CFR Part 217, which was published at 68 FR 43332 on July 22, 2003, is adopted as a final rule without change.

[FR Doc. 04-10881 Filed 5-12-04; 8:45 am]

BILLING CODE 5001-08-P

[Federal Register: May 13, 2004 (Volume 69, Number 93)]

[Rules and Regulations]

[Page 26509]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr13my04-13]

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DEPARTMENT OF DEFENSE

48 CFR Part 252

Defense Federal Acquisition Regulation Supplement; Technical Amendments

AGENCY: Department of Defense (DoD).

ACTION: Final rule.

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SUMMARY: DoD is making technical amendments to the Defense Federal Acquisition Regulation Supplement to update clause dates and references.

EFFECTIVE DATE: May 13, 2004.

FOR FURTHER INFORMATION CONTACT: Ms. Michele Peterson, Defense Acquisition Regulations Council, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0311; facsimile (703) 602-0350.

List of Subjects in 48 CFR Part 252

Government procurement.

Michele P. Peterson,

Executive Editor, Defense Acquisition Regulations Council.

0

Therefore, 48 CFR Part 252 is amended as follows:

0

1. The authority citation for 48 CFR Part 252 continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

252.212-7001 [Amended]

0

2. Section 252.212-7001 is amended as follows:

0

a. In paragraph (b), in entry ``252.225-7016'', by removing ``(APR 2003)'' the first place it appears and adding in its place ``(MAY 2004)''; and

0

b. In paragraph (b), in entry ``252.232-7003'', by removing ``(DEC 2003)'' and adding in its place ``(JAN 2004)''.

252.225-7016 [Amended]

0

3. Section 252.225-7016 is amended as follows:

0

a. By revising the clause date to read ``MAY 2004''; and

0

b. In paragraph (d), in the first sentence, by removing ``225.7019-3'' and adding in its place ``225.7009-3''.

[FR Doc. 04-10882 Filed 5-12-04; 8:45 am]

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Federal Register: May 13, 2004 (Volume 69, Number 93)]

[Proposed Rules]

[Page 26533-26538]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr13my04-20]

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DEPARTMENT OF DEFENSE

48 CFR Part 219 and Appendix I to Chapter 2

[DFARS Case 2003-D013]

Defense Federal Acquisition Regulation Supplement; DoD Pilot

Mentor-Prot[eacute]g[eacute] Program

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule with request for comments.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to update policy pertaining to the DoD Pilot Mentor-Prot[eacute]g[eacute] Program. The proposed changes authorize the Director, Small and Disadvantaged Business Utilization, of each military department or defense agency to approve mentor firms and mentor-prot[eacute]g[eacute] agreements.

DATES: Comments on the proposed rule should be submitted to the address shown below on or before July 12, 2004, to be considered in the formation of the final rule.

ADDRESSES: Respondents may submit comments directly on the World Wide Web at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. As an

alternative,

[[Page 26534]]

respondents may e-mail comments to: dfars@osd.mil. Please cite DFARS Case 2003-D013 in the subject line of e-mailed comments.

Respondents that cannot submit comments using either of the above methods may submit comments to: Defense Acquisition Regulations Council, Attn: Mr. Thaddeus Godlewski, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; facsimile (703) 602-0350. Please cite DFARS Case 2003-D013.

At the end of the comment period, interested parties may view public comments on the World Wide Web at http://emissary.acq.osd.mil/dar/dfars.nsf

.

FOR FURTHER INFORMATION CONTACT: Mr. Thaddeus Godlewski, (703) 602-2022.

SUPPLEMENTARY INFORMATION:

A. Background

This rule proposes changes to the DoD Pilot Mentor-Prot[eacute]g[eacute] Program to authorize the Director, Small and Disadvantaged Business Utilization (SADBU), of each military department or defense agency to approve contractors as mentor firms and to approve mentor-prot[eacute]g[eacute] agreements. The Director, Office of the Secretary of Defense, SADBU, will retain policy and oversight responsibility for the offices participating in the Program and will remain the principal budget authority for the Program. This rule also updates procedures for implementation of the Program to reflect current Program requirements.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

DoD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the changes in the rule relate primarily to administrative aspects of the DoD Pilot Mentor-Prot[eacute]g[eacute] Program. The basic principles of the Program have not changed. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2003-D013.

C. Paperwork Reduction Act

The information collection requirements of the DoD Pilot Mentor Prot[eacute]g[eacute] Program have been approved by the Office of Management and Budget under Control Number 0704-0332.

List of Subjects in 48 CFR Part 219

Government procurement.

Michele P. Peterson,

Executive Editor, Defense Acquisition Regulations Council.

Therefore, DoD proposes to amend 48 CFR Part 219 and Appendix I to Chapter 2 as follows:

1. The authority citation for 48 CFR Part 219 and Appendix I to subchapter I continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 219--SMALL BUSINESS PROGRAMS

2. Section 219.7100 is amended by revising the first sentence to read as follows:

Sec. 219.7100 Scope.

This subpart implements the Pilot Mentor-Prot[eacute]g[eacute] Program (hereafter referred to as the ``Program'') established under Section 831 of the National Defense Authorization Act for Fiscal Year 1991 (Pub. L. 101-510; 10 U.S.C. 2302 note). * * *

3. Section 219.7102 is amended by revising paragraphs (a) and (d) to read as follows:

Sec. 219.7102 General.

* * * * *

(a) Mentor firms that are prime contractors with at least one active subcontracting plan negotiated under FAR Subpart 19.7 or under the DoD Comprehensive Subcontracting Test Program.

* * * * *

(d) Incentives that DoD may provide to mentor firms, including--

(1) Reimbursement for developmental assistance costs through--

(i) A separately priced contract line item on a DoD contract; or

(ii) A separate contract, upon written determination by the cognizant Component Director, Small and Disadvantaged Business Utilization (SADBU), that unusual circumstances justify reimbursement using a separate contract; or

(2) Credit toward applicable subcontracting goals, established under a subcontracting plan negotiated under FAR Subpart 19.7, or under the DoD Comprehensive Subcontracting Test Program for developmental assistance costs that are not reimbursed.

4. Section 219.7103-1 is revised to read as follows:

219.7103-1 General.

The procedures for application, acceptance, and participation in the Program are in Appendix I, Policy and Procedures for the DoD Pilot Mentor-Prot[eacute]g[eacute] Program. The Director, SADBU, of each military department or defense agency has the authority to approve contractors as mentor firms, approve mentor-prot[eacute]g[eacute] agreements, and forward approved mentor-prot[eacute]g[eacute] agreements to the contracting officer when funding is available.

5. Section 219.7103-2 is amended as follows:

a. By revising paragraphs (d), (e), and (f); and

b. In paragraph (h), in the parenthetical, by removing ``I-112'' and adding in its place ``I-113''. The revised text reads as follows:

219.7103-2 Contracting officer responsibilities.

* * * * *

(d) Modify applicable contract(s) to establish a contract line item for reimbursement of developmental assistance costs if--

(1) A DoD program manager or the cognizant Component Director, SADBU, has made funds available for that purpose; and

(2) The contractor has an approved mentor-prot[eacute]g[eacute] agreement.

(e) Negotiate and award a separate contract for reimbursement of developmental assistance costs only if--

(1) Funds are available for that purpose;

(2) The contractor has an approved mentor-prot[eacute]g[eacute] agreement; and

(3) The cognizant Component Director, SADBU, has made a determination in accordance with 219.7102(d)(1)(ii).

(f) Not authorize reimbursement for costs of assistance furnished to a prot[eacute]g[eacute] firm in excess of $1,000,000 in a fiscal year unless a written determination from the cognizant Component Director, SADBU, is obtained.

* * * * *

219.7105 [Amended]

6. Section 219.7105 is amended by removing ``I-111'' and adding in its place ``I-112''.

219.7106 [Amended]

7. Section 219.7106 is amended in the first sentence by removing ``I-112'' and adding in its place ``I-113''.

8. Appendix I to Chapter 2 is revised to read as follows:

[[Page 26535]]

Appendix I--Policy and Procedures for the DOD Pilot Mentor-Protege Program

I-100 Purpose.

(a) This Appendix I to 48 CFR Chapter 2 implements the Pilot Mentor-Prot[eacute]g[eacute] Program (hereafter referred to as the ``Program'') established under Section 831 of Pub. L. 101-510, the National Defense Authorization Act for Fiscal Year 1991 (10 U.S.C. 2302 note). The purpose of the Program is to--

(1) Provide incentives to major DoD contractors, performing under at least one active approved subcontracting plan negotiated with DoD or another Federal agency, to assist prot[eacute]g[eacute] firms in enhancing their capabilities to satisfy DoD and other contract and subcontract requirements;

(2) Increase the overall participation of prot[eacute]g[eacute] firms as subcontractors and suppliers under DoD contracts, other Federal agency contracts, and commercial contracts; and (3) Foster the establishment of long-term business relationships between prot[eacute]g[eacute] firms and such contractors.

(b) Under the Program, eligible companies approved as mentor firms will enter into mentor-prot[eacute]g[eacute] agreements with eligible prot[eacute]g[eacute] firms to provide appropriate developmental assistance to enhance the capabilities of the prot[eacute]g[eacute] firms to perform as subcontractors and suppliers. DoD may provide the mentor firm with either cost reimbursement or credit against applicable subcontracting goals established under contracts with DoD or other Federal agencies.

(c) DoD will measure the overall success of the Program by the extent to which the Program results in--

(1) An increase in the dollar value of contract and subcontract awards to prot[eacute]g[eacute] firms (under DoD contracts, contracts awarded by other Federal agencies, and commercial contracts) from the date of their entry into the Program until 2 years after the conclusion of the agreement;

(2) An increase in the number and dollar value of subcontracts awarded to a prot[eacute]g[eacute] firm (or former prot[eacute]g[eacute] firm) by its mentor firm (or former mentor firm);

(3) An increase in the employment level of prot[eacute]g[eacute] firms from the date of entry into the Program until 2 years after the completion of the agreement.

(d) This policy sets forth the procedures for participation in the Program applicable to companies that are interested in receiving--

(1) Reimbursement through a separate contract line item in a DoD contract or a separate contract with DoD; or

(2) Credit toward applicable subcontracting goals for costs incurred under the Program.

I-101 Definitions

I-101.1 Historically Black College or University

An institution determined by the Secretary of Education to meet the requirements of 34 CFR 608.2. The term also means any nonprofit research institution that was an integral part of such a college or university before November 14, 1986.

I-101.2 Minority Institution of Higher Education

An institution of higher education with a student body that reflects the composition specified in section 312(b)(3), (4), and (5) of the Higher Education Act of 1965 (20 U.S.C. 1058(b)(3), (4), and (5)).

I-101.3 Eligible Entity Employing the Severely Disabled

A business entity operated on a for-profit or nonprofit basis

that--

(a) Uses rehabilitative engineering to provide employment opportunities for severely disabled individuals and integrates severely disabled individuals into its workforce;

(b) Employs severely disabled individuals at a rate that averages not less than 20 percent of its total workforce;

(c) Employs each severely disabled individual in its workforce generally on the basis of 40 hours per week; and

(d) Pays not less than the minimum wage prescribed pursuant to section 6 of the Fair Labor Standards Act (29 U.S.C. 206) to those employees who are severely disabled individuals.

I-101.4 Severely Disabled Individual

An individual who has a physical or mental disability which constitutes a substantial handicap to employment and which, in accordance with criteria prescribed by the Committee for the Purchase from the Blind and Other Severely Handicapped established by the first section of the Act of June 25, 1938 (41 U.S.C. 46; popularly known as the ``Javits-Wagner-O'Day Act'') is of such a nature that the individual is otherwise prevented from engaging in normal competitive employment.

I-101.5 Small Disadvantaged Business (SDB)

A small business concern that is--

(a) An SDB concern as defined at 219.001, paragraph (1) of the definition of ``small disadvantaged business concern'';

(b) A business entity owned and controlled by an Indian tribe as defined in Section 8(a)(13) of the Small Business Act (15 U.S.C. 637(a)(13)); or

(c) A business entity owned and controlled by a Native Hawaiian Organization as defined in Section 8(a)(15) of the Small Business Act.

I.101.6 Women-Owned Small Business (WOSB)

A small business concern owned and controlled by women as defined in Section 8(d)(3)(D) of the Small Business Act (15 U.S.C. 637(d)(3)(D)).

I-102 Participant Eligibility

(a) To be eligible to participate as a mentor, an entity must

be--

(1) An entity other than small business, unless a waiver to the small business exception has been obtained from the Director, Small and Disadvantaged Business Utilization (SADBU), OUSD (AT&L), that is a prime contractor to DoD with an active subcontracting plan; or

(2) A graduated 8(a) firm that provides documentation of its ability to serve as a mentor; and

(3) Approved to participate as a mentor in accordance with I-105.

(b) To be eligible to participate as a prot[eacute]g[eacute], an entity must be--

(1) An SDB, a WOSB, or an eligible entity employing the severely disabled;

(2) Eligible for the award of Federal contracts; and

(3) A small business according to the Small Business Administration (SBA) size standard for the North American Industry Classification System (NAICS) code that represents the contemplated supplies or services to be provided by the prot[eacute]g[eacute] firm to the mentor firm if the firm is representing itself as a qualifying entity under the definition at I-101.5(a) or I-101.6.

(c) Mentor firms may rely in good faith on a written representation that the entity meets the requirements of paragraph (a) of this section, except for a prot[eacute]g[eacute]'s status as a small disadvantaged business concern (see FAR 19.703(b)).

(d) If at any time the SBA (or DoD in the case of entities employing the severely disabled) determines that a prot[eacute]g[eacute] is ineligible, assistance that the mentor firm furnishes to the prot[eacute]g[eacute] after the date of the determination may not be considered assistance furnished under the Program.

(e) A company may not be approved for participation in the Program as a mentor firm if, at the time of requesting participation in the Program, it is currently debarred or suspended from contracting with the Federal Government pursuant to FAR Subpart 9.4. (f) If the mentor firm is suspended or debarred while performing under an approved mentor-prot[eacute]g[eacute] agreement, the mentor firm--

(1) May continue to provide assistance to its prot[eacute]g[eacute] firms pursuant to approved mentor-prot[eacute]g[eacute] agreements entered into prior to the imposition of such suspension or debarment;

(2) May not be reimbursed or take credit for any costs of providing developmental assistance to its prot[eacute]g[eacute] firm, incurred more than 30 days after the imposition of such suspension or debarment; and

(3) Must promptly give notice of its suspension or debarment to its prot[eacute]g[eacute] firm and the cognizant Component Director, SADBU.

I-103 Program Duration

(a) New mentor-prot[eacute]g[eacute] agreements may be submitted and approved through September 30, 2005.

(b) Mentors incurring costs prior to September 30, 2008, pursuant to an approved mentor-prot[eacute]g[eacute] agreement may be eligible for--

(1) Credit toward the attainment of its applicable subcontracting goals for unreimbursed costs incurred in providing developmental assistance to its prot[eacute]g[eacute] firm(s);

(2) Reimbursement pursuant to the execution of a separately priced contract line item added to a DoD contract; or

(3) Reimbursement pursuant to entering into a separate DoD contract upon

[[Page 26536]]

determination by the cognizant Component Director, SADBU, that unusual circumstances justify using a separate contract.

I-104 Selection of Prot[eacute]g[eacute] Firms

(a) Mentor firms will be solely responsible for selecting prot[eacute]g[eacute] firms. Mentor firms are encouraged to identify and select concerns that are defined as emerging SDB prot[eacute]g[eacute] firms.

(b) The selection of prot[eacute]g[eacute] firms by mentor firms may not be protested, except as in paragraph (c) of this section.

(c) In the event of a protest regarding the size or disadvantaged status of an entity selected to be a prot[eacute]g[eacute] firm as defined in I-101.5, the mentor firm must refer the protest to the SBA to resolve in accordance with 13 CFR Part 121 (with respect to size) or 13 CFR Part 124 (with respect to disadvantaged status).

(d) For purposes of the Small Business Act, no determination of affiliation or control (either direct or indirect) may be found between a prot[eacute]g[eacute] firm and its mentor firm on the basis that the mentor firm has agreed to furnish (or has furnished) to its prot[eacute]g[eacute] firm, pursuant to a mentor-prot[eacute]g[eacute] agreement, any form of developmental assistance described in I-107(f).

(e) A prot[eacute]g[eacute] firm may have only one active DoD mentor-prot[eacute]g[eacute] agreement.

I-105 Mentor Approval Process

(a) An entity seeking to participate as a mentor must apply to the cognizant Component Director, SADBU, to establish its initial eligibility as a mentor. This application may accompany its initial mentor-prot[eacute]g[eacute] agreement.

(b) The application must provide the following information:

(1) A statement that the company is currently performing under at least one active approved subcontracting plan negotiated with DoD or another Federal agency pursuant to FAR 19.702, and that the company is currently eligible for the award of Federal contracts or a statement that the entity is a graduated 8(a) firm.

(2) A summary of the company's historical and recent activities and accomplishments under its small and disadvantaged business utilization program.

(3) The total dollar amount of DoD contracts and subcontracts that the company received during the 2 preceding fiscal years. (Show prime contracts and subcontracts separately per year.)

(4) The total dollar amount of all other Federal agency contracts and subcontracts that the company received during the 2 preceding fiscal years. (Show prime contracts and subcontracts separately per year.)

(5) The total dollar amount of subcontracts that the company awarded under DoD contracts during the 2 preceding fiscal years.

(6) The total dollar amount of subcontracts that the company awarded under all other Federal agency contracts during the 2 preceding fiscal years.

(7) The total dollar amount and percentage of subcontracts that the company awarded to all SDB and WOSB firms under DoD contracts and other Federal agency contracts during the 2 preceding fiscal years. (Show DoD subcontract awards separately.) If the company presently is required to submit a Standard Form (SF) 295, Summary Subcontract Report, the request must include copies of the final reports for the 2 preceding fiscal years.

(8) Information on the company's ability to provide developmental assistance to eligible prot[eacute]g[eacute]s.

(c) A template of the mentor application is available at: http://www.acq.osd.mil/sadbu/mentor_protege

.

(d) Companies that apply for participation and are not approved will be provided the reasons and an opportunity to submit additional information for reconsideration.

I-106 Development of Mentor-Prot[eacute]g[eacute] Agreements

(a) Prospective mentors and their prot[eacute]g[eacute]s may choose to execute letters of intent prior to negotiation of mentor-prot[eacute]g[eacute] agreements.

(b) The agreements should be structured after completion of a preliminary assessment of the developmental needs of the prot[eacute]g[eacute] firm and mutual agreement regarding the developmental assistance to be provided to address those needs and enhance the prot[eacute]g[eacute]'s ability to perform successfully under contracts or subcontracts.

(c) A mentor firm may not require a prot[eacute]g[eacute] firm to enter into a mentor-prot[eacute]g[eacute] agreement as a condition for award of a contract by the mentor firm, including a subcontract under a DoD contract awarded to the mentor firm.

(d) The mentor-prot[eacute]g[eacute] agreement may provide for the mentor firm to furnish any or all of the following types of developmental assistance:

(1) Assistance by mentor firm personnel in--

(i) General business management, including organizational management, financial management, and personnel management, marketing, business development, and overall business planning;

(ii) Engineering and technical matters such as production inventory control and quality assurance; and

(iii) Any other assistance designed to develop the capabilities of the prot[eacute]g[eacute] firm under the developmental program.

(2) Award of subcontracts under DoD contracts or other contracts on a noncompetitive basis.

(3) Payment of progress payments for the performance of subcontracts by a prot[eacute]g[eacute] firm in amounts as provided for in the subcontract; but in no event may any such progress payment exceed 100 percent of the costs incurred by the prot[eacute]g[eacute] firm for the performance of the subcontract. Provision of progress payments by a mentor firm to a prot[eacute]g[eacute] firm at a rate other than the customary rate for the firm must be implemented in accordance with FAR 32.504(c).

(4) Advance payments under such subcontracts. The mentor firm must administer advance payments in accordance with FAR Subpart 32.4.

(5) Loans.

(6) Investment(s) in the prot[eacute]g[eacute] firm in exchange for an ownership interest in the prot[eacute]g[eacute] firm, not to exceed 10 percent of the total ownership interest. Investments may include, but are not limited to, cash, stock, and contributions in kind.

(7) Assistance that the mentor firm obtains for the prot[eacute]g[eacute] firm from one or more of the following:

(i) Small Business Development Centers established pursuant to Section 21 of the Small Business Act (15 U.S.C. 648).

(ii) Entities providing procurement technical assistance pursuant to 10 U.S.C. Chapter 142 (Procurement Technical Assistance Centers).

(iii) Historically Black colleges and universities.

(iv) Minority institutions of higher education.

(e) Pursuant to FAR 31.109, approved mentor firms seeking either reimbursement or credit are strongly encouraged to enter into an advance agreement with the contracting officer responsible for determining final indirect cost rates under FAR 42.705. The purpose of the advance agreement is to establish the accounting treatment of the costs of the developmental assistance pursuant to the mentor-prot[eacute]g[eacute] agreement prior to the incurring of any costs by the mentor firm. An advance agreement is an attempt by both the Government and the mentor firm to avoid possible subsequent dispute based on questions related to reasonableness, allocability, or allowability of the costs of developmental assistance under the Program. Absent an advance agreement, mentor firms are advised to establish the accounting treatment of such costs and to address the need for any changes to their cost accounting practices that may result from the implementation of a mentor-prot[eacute]g[eacute] agreement, prior to incurring any costs, and irrespective of whether costs will be reimbursed or credited.

(f) Developmental assistance provided under an approved mentor-prot[eacute]g[eacute] agreement is distinct from, and must not duplicate, any effort that is the normal and expected product of the award and administration of the mentor firm's subcontracts. Costs associated with the latter must be accumulated and charged in accordance with the contractor's approved accounting practices; they are not considered developmental assistance costs eligible for either credit or reimbursement under the Program.

I-107 Elements of a mentor-prot[eacute]g[eacute] agreement.

Each mentor-prot[eacute]g[eacute] agreement will contain the

following elements:

(a) The name, address, e-mail address, and telephone number of the mentor and prot[eacute]g[eacute] points of contact;

(b) The NAICS code(s) that represent the contemplated supplies or services to be provided by the prot[eacute]g[eacute] firm to the mentor firm and a statement that, at the time the agreement is submitted for approval, the prot[eacute]g[eacute] firm, if an SDB or WOSB concern, does not exceed the size standard for the appropriate NAICS code;

(c) A statement that the prot[eacute]g[eacute] firm is eligible to participate in accordance with I-102(b);

(d) A statement that the mentor is eligible to participate in accordance with I-102;

[[Page 26537]]

(e) A preliminary assessment of the developmental needs of the prot[eacute]g[eacute] firm;

(f) A developmental program for the prot[eacute]g[eacute] firm specifying the type of assistance the mentor will provide to the prot[eacute]g[eacute] and how that assistance will--

(1) Increase the prot[eacute]g[eacute]'s ability to participate in DoD, Federal, and/or commercial contracts and subcontracts; and

(2) Increase small business subcontracting opportunities in industry categories where eligible prot[eacute]g[eacute]'s or other small business firms are not dominant in the company's vendor base;

(g) Factors to assess the prot[eacute]g[eacute] firm's developmental progress under the Program, including specific milestones for providing each element of the identified assistance;

(h) An estimate of the dollar value and type of subcontracts that the mentor firm will award to the prot[eacute]g[eacute] firm, and the period of time over which the subcontracts will be awarded;

(i) A statement from the prot[eacute]g[eacute] firm indicating its commitment to comply with the requirements for reporting and for review of the agreement during the duration of the agreement and for 2 years thereafter;

(j) A program participation term for the agreement that does not exceed 3 years. Requests for an extension of the agreement for a period not to exceed an additional 2 years are subject to the approval of the cognizant Component Director, SADBU. The justification must detail the unusual circumstances that warrant a term in excess of 3 years;

(k) Procedures for the mentor firm to notify the

prot[eacute]g[eacute] firm in writing at least 30 days in advance of the mentor firm's intent to voluntarily withdraw its participation in the Program. A mentor firm may voluntarily terminate its mentor-prot[eacute]g[eacute] agreement(s) only if it no longer wants to be a participant in the Program as a mentor firm. Otherwise, a mentor firm must terminate a mentor-prot[eacute]g[eacute] agreement for cause;

(l) Procedures for the mentor firm to terminate the mentor-prot[eacute]g[eacute] agreement for cause which provide that--

(1) The mentor firm must furnish the prot[eacute]g[eacute] firm a written notice of the proposed termination, stating the specific reasons for such action, at least 30 days in advance of the effective date of such proposed termination;

(2) The prot[eacute]g[eacute] firm must have 30 days to respond to such notice of proposed termination, and may rebut any findings believed to be erroneous and offer a remedial program;

(3) Upon prompt consideration of the prot[eacute]g[eacute] firm's response, the mentor firm must either withdraw the notice of proposed termination and continue the prot[eacute]g[eacute] firm's participation, or issue the notice of termination; and

(4) The decision of the mentor firm regarding termination for cause, conforming with the requirements of this section, will be final and is not reviewable by DoD;

(m) Procedures for a prot[eacute]g[eacute] firm to notify the mentor firm in writing at least 30 days in advance of the prot[eacute]g[eacute] firm's intent to voluntarily terminate the mentor-prot[eacute]g[eacute] agreement;

(n) Additional terms and conditions as may be agreed upon by both parties; and

(o) Signatures and dates for both parties to the mentor-prot[eacute]g[eacute] agreement.

I-108 Submission and approval of mentor-prot[eacute]g[eacute] agreements

(a) Upon solicitation or as determined by the cognizant DoD component, mentors will submit--

(1) A mentor application pursuant to I-105, if the mentor has not been previously approved to participate;

(2) A signed mentor-prot[eacute]g[eacute] agreement pursuant to I-107;

(3) A statement as to whether the mentor is seeking credit or reimbursement of costs incurred;

(4) The estimated cost of the technical assistance to be provided, broken out per year;

(5) A justification if program participation term is greater than 3 years (Term of agreements may not exceed 5 years); and

(6) For reimbursable agreements, a specific justification for developmental costs in excess of $1,000,000 per year.

(b) When seeking reimbursement of costs, cognizant DoD components may require additional information.

(c) The mentor-prot[eacute]g[eacute] agreement must be approved by the cognizant Component Director, SADBU, prior to incurring costs eligible for credit.

(d) The cognizant DoD component will execute a contract modification or a separate contract, if justified pursuant to I-103(b)(3), prior to the mentor's incurring costs eligible for reimbursement.

(e) Credit agreements that are not associated with an existing DoD program and/or component will be submitted for approval to Director, SADBU, Defense Contract Management Agency (DCMA), via the mentor's cognizant administrative contracting officer.

(f) A prospective mentor that has identified Program funds to be made available from a DoD program manager must provide the information in paragraph (a) of this section through the program manager to the cognizant Component Director, SADBU, with a letter signed by the program manager indicating the amount of funding that has been identified for the developmental assistance program.

I-109 Reimbursable agreements

The following program provisions apply to all reimbursable mentor-prot[eacute]g[eacute] agreements:

(a) Assistance provided in the form of progress payments to a prot[eacute]g[eacute] firm in excess of the customary progress payment rate for the firm will be reimbursed only if implemented in accordance with FAR 32.504(c).

(b) Assistance provided in the form of advance payments will be reimbursed only if the payments have been provided to a prot[eacute]g[eacute] firm under subcontract terms and conditions similar to those in the clause at FAR 52.232-12, Advance Payments. Reimbursement of any advance payments will be made pursuant to the inclusion of the clause at DFARS 252.232-7005, Reimbursement of Subcontractor Advance Payments--DoD Pilot Mentor-Prot[eacute]g[eacute] Program, in appropriate contracts. In requesting reimbursement, the mentor firm agrees that the risk of any financial loss due to the failure or inability of a prot[eacute]g[eacute] firm to repay any unliquidated advance payments will be the sole responsibility of the mentor firm.

(c) The primary forms of developmental assistance authorized for reimbursement under the Program are identified in I-106(d). On a case-by-case basis, Component Directors, SADBU, at their discretion, may approve additional incidental expenses for reimbursement, provided these expenses do not exceed 10 percent of the total estimated cost of the agreement.

(d) The total amount reimbursed to a mentor firm for costs of assistance furnished to a prot[eacute]g[eacute] firm in a fiscal year may not exceed $1,000,000 unless the cognizant Component Director, SADBU, determines in writing that unusual circumstances justify reimbursement at a higher amount. Request for authority to reimburse in excess of $1,000,000 must detail the unusual circumstances and must be endorsed and submitted by the program manager to the cognizant Component Director, SADBU.

(e) Developmental assistance costs that are incurred pursuant to an approved reimbursable mentor-prot[eacute]g[eacute] agreement, and have been charged to, but not reimbursed through, a separate contract, or through a separately priced contract line item added to a DoD contract, will not be otherwise reimbursed, as either a direct or indirect cost, under any other DoD contract, irrespective of whether the costs have been recognized for credit against applicable subcontracting goals.

I-110 Credit Agreements

I-110.1 Program Provisions Applicable to Credit Agreements

(a) Developmental assistance costs incurred by a mentor firm for providing assistance to a prot[eacute]g[eacute] firm pursuant to an approved credit mentor-prot[eacute]g[eacute] agreement may be credited as if the costs were incurred under a subcontract award to that prot[eacute]g[eacute], for the purpose of determining the performance of the mentor firm in attaining an applicable subcontracting goal established under any contract containing a subcontracting plan pursuant to the clause at FAR 52.219-9, Small Business Subcontracting Plan, or the provisions of the DoD Comprehensive Subcontracting Plan Test Program. Unreimbursed developmental assistance costs incurred for a prot[eacute]g[eacute] firm that is an eligible entity employing the severely disabled may be credited toward the mentor firm's small disadvantaged business subcontracting goal, even if the prot[eacute]g[eacute] firm is not a small disadvantaged business concern.

(b) Costs that have been reimbursed through inclusion in indirect expense pools may also be credited as subcontract awards for determining the performance of the mentor firm in attaining an applicable subcontracting goal established under any contract containing a subcontracting plan. However, costs that have not been reimbursed because they are not reasonable,allocable, or allowable will not be recognized for crediting purposes.

(c) Other costs that are not eligible for reimbursement pursuant to I-106(d) may be recognized for credit only if requested, identified, and incorporated in an approved mentor-prot[eacute]g[eacute] agreement.

(d) The amount of credit a mentor firm may receive for any such unreimbursed developmental assistance costs must be equal to--

(1) Four times the total amount of such costs attributable to assistance provided by small business development centers, historically Black colleges and universities, minority institutions, and procurement technical assistance centers.

(2) Three times the total amount of such costs attributable to assistance furnished by the mentor's employees.

(3) Two times the total amount of other such costs incurred by the mentor in carrying out the developmental assistance program.

I-110.2 Credit Adjustments

(a) Adjustments may be made to the amount of credit claimed if the Director, SADBU, OUSD(AT&L), determines that--

(1) A mentor firm's performance in the attainment of its subcontracting goals through actual subcontract awards declined from the prior fiscal year without justifiable cause; and

(2) Imposition of such a limitation on credit appears to be warranted to prevent abuse of this incentive for the mentor firm's participation in the Program.

(b) The mentor firm must be afforded the opportunity to explain the decline in small business subcontract awards before imposition of any such limitation on credit. In making the final decision to impose a limitation on credit, the Director, SADBU, OUSD(AT&L), must consider--

(1) The mentor firm's overall small business participation rates (in terms of percentages of subcontract awards and dollars awarded) as compared to the participation rates existing during the 2 fiscal years prior to the firm's admission to the Program;

(2) The mentor firm's aggregate prime contract awards during the prior 2 fiscal years and the total amount of subcontract awards under such contracts; and

(3) Such other information the mentor firm may wish to submit.

(c) The decision of the Director, SADBU, OUSD(AT&L), regarding the imposition of a limitation on credit will be final.

I-111 Agreement Terminations

(a) Mentors and/or prot[eacute]g[eacute]s must send a copy of any termination notices to the cognizant Component Director, SADBU, that approved the agreement, and the DCMA administrative contracting officer responsible for conducting the annual review pursuant to I-113.

(b) For reimbursable agreements, mentors must also send copies of any termination to the program manager and to the contracting officer.

(c) Termination of a mentor-prot[eacute]g[eacute] agreement will not impair the obligations of the mentor firm to perform pursuant to its contractual obligations under Government contracts and subcontracts.

(d) Termination of all or part of the mentor-prot[eacute]g[eacute] agreement will not impair the obligations of the prot[eacute]g[eacute] firm to perform pursuant to its contractual obligations under any contract awarded to the prot[eacute]g[eacute] firm by the mentor firm.

(e) Mentors and prot[eacute]g[eacute]s will follow provisions of the mentor-prot[eacute]g[eacute] agreement developed in compliance with I-107(k) through (m).

I-112 Reporting Requirements.

I-112.1 Reporting Requirements applicable to SF294/295 Reports.

(a) Amounts credited toward applicable subcontracting goal(s) for unreimbursed costs under the Program must be separately identified on the appropriate SF294/SF295 reports from the amounts credited toward the goal(s) resulting from the award of actual subcontracts to prot[eacute]g[eacute] firms. The combination of the two must equal the mentor firm's overall accomplishment toward the applicable goal(s).

(b) A mentor firm may receive credit toward the attainment of an SDB subcontracting goal for each subcontract awarded by the mentor firm to an entity that qualifies as a prot[eacute]g[eacute] firm pursuant to I-101.3 or I-101.5.

(c) For purposes of calculating any incentives to be paid to a mentor firm for exceeding an SDB subcontracting goal pursuant to the clause at FAR 52.219-26, Small Disadvantaged Business Participation Program--Incentive Subcontracting, incentives will be paid only if an SDB subcontracting goal has been exceeded as a result of actual subcontract awards to SDBs (i.e., excluding credit).

I-112.2 Program Specific Reporting Requirements.

(a) Mentors must report on the progress made under active mentor-prot[eacute]g[eacute] agreements semiannually for the periods ending March 31st and September 30th throughout the Program participation term of the agreement. The September 30th report must address the entire fiscal year.

(b) Reports are due 30 days after the close of each reporting period.

(c) Each report must include the following data on performance under the mentor-prot[eacute]g[eacute] agreement:

(1) Dollars obligated (for reimbursable agreements).

(2) Expenditures.

(3) Dollars credited, if any, toward applicable subcontracting goals as a result of developmental assistance provided to the prot[eacute]g[eacute] and a copy of the SF294 and/or SF295 for each contract where developmental assistance was credited.

(4) The number and dollar value of subcontracts awarded to the prot[eacute]g[eacute] firm.

(5) Description of developmental assistance provided, including milestones achieved.

(6) Impact of the agreement in terms of capabilities enhanced, certifications received, and/or technology transferred.

(d) A recommended reporting format and guidance for its submission are available at: http://www.acq.osd.mil/sadbu/mentor_protege

.

(e) The prot[eacute]g[eacute] must provide data, annually by October 31st, on the progress made during the prior fiscal year by the prot[eacute]g[eacute] in employment, revenues, and participation in DoD contracts during--

(1) Each fiscal year of the Program participation term; and

(2) Each of the 2 fiscal years following the expiration of the Program participation term.

(f) The prot[eacute]g[eacute] report required by paragraph (e) of this section may be provided as part of the mentor report for the period ending September 30th required by paragraph (a) of this section.

(g) Progress reports must be submitted--

(1) For credit agreements, to the cognizant Component Director, SADBU, that approved the agreement, and the mentor's cognizant DCMA administrative contracting officer; and

(2) For reimbursable agreements, to the cognizant Component Director, SADBU, the contracting officer, the DCMA administrative contracting officer, and the program manager.

I-113 Performance reviews.

(a) DCMA will conduct annual performance reviews of the progress and accomplishments realized under approved mentor-prot[eacute]g[eacute] agreements. These reviews must verify data provided on the semiannual reports and must provide information as to--

(1) Whether all costs reimbursed to the mentor firm under the agreement were reasonably incurred to furnish assistance to the prot[eacute]g[eacute] in accordance with the mentor-prot[eacute]g[eacute] agreement and applicable regulations and procedures; and

(2) Whether the mentor and prot[eacute]g[eacute] accurately reported progress made by the prot[eacute]g[eacute] in employment, revenues, and participation in DoD contracts during the Program participation term and for 2 fiscal years following the expiration of the Program participation term.

(b) A checklist for annual performance reviews is available at http://www.acq.osd.mil/sadbu/mentor_protege.

[FR Doc. 04-10883 Filed 5-12-04; 8:45 am]

BILLING CODE 5001-08-P